Economics Chapter 22 – Flashcards
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Economists generally define the short run as being
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D the period of time in which at least one of the firms inputs, usually plant size, is fixed
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In economics, how long is the long run?
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C Whatever time it takes a firm to vary all inputs
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Which of the following is a short run decison for a firm?
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A laying off workers
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The addition to total costs associated with the production of one more unit of output is referred to as
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C marginal cost
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Marginal physical product of labor equals
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D the wage divided by marginal cost
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summing all of the costs that do not change as output varies yields
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A fixed costs
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As the quantity of labor increases while the amount of other inputs are held constant, marginal product of labor will
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D initially increase and then decrease
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The law of diminishing marginal product states that
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D Successive equal-sized increases in labor, when added to fixed factors of production, will result in smaller increases of output
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Suppose the manager of a restaurant notices that when she has too many waiters on the floor for a shift that the waiters get in each others way and fewer dinners are served. this is an example of
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A Diminishing marginal product
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The marginal product of labor may increase rapidly initially as more
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D workers are able to specialize
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What happens to the marginal cost curve when the marginal physical product of labor is rising?
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D It becomes downward sloping
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The marginal productivity of labor will eventually decrease as mor eworkers are employed because
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C on the average each worker will have fewer inputs to work with
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Marginal cost is equal to
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D Both A and B are correct A-Change in total cost divided by change in output, B-change in total variable cost divided by change in output
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If the price of labor is constant and a firm experiences diminishing marginal product, then its
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D Marginal costs increase
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Which of the following is true?
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A. If MC is Above ATC, ATC must be increasing
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in the above table, diminishing marginal product occurs after employing the
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C third worker
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If the average product of 20 workers is 100 bushels of wheat and the average product of 21 workers of wheat is 99 bushels of wheat, then the marginal product of the 21st worker was
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A 79 bushels of wheat
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Refer to the above table. What does total product equal when 4 units of labor are used?
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A 1328
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The marginal cost curve always intersects the average total cost curve at the point at which the average total cost curve
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A is at its minimum
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All of the following are most likely to be fixed costs EXCEPT the cost relating to
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B Packaging
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If the price of labor is constant and a firm experiences diminishing marginal product, then its
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C average variable cost increases
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which of the following statement is correct?
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C when marginal product is greater than average physical product, average physical product is increasing
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When the average physical product is falling
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C average variable costs are rising
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The planning curve for a firm is the
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B long run average cost curve
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If a firm gets so large that management of employees and other resources becomes a costly problem, it will be experiencing
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C dis-economies of scale
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Which of the following is true for a firm in the long run?
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B all costs are variable costs
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in the above figure, the long run cost curve between points A and B illustrates
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D economies of scale
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Which of the following is not one of the reasons a firm might be expected to experience economies of scale?
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A depreciation
